1. Resources for Every Stage of Federal Student Aid
Financial Literacy
Resources for Every Stage of Federal Student Aid
ETSU, Quillen College of Medicine, Student Financial Aid
Joyce Underwood, Director, Student Financial Services
Christi Franklin, Assistant Director, Financial Services
October 27, 2017
Note: This presentation was originally prepared in 2015 and updated / reviewed in 2016 and You may add or delete content to/from it. However, you must ensure that any edits made to this work and/or any uses of this work are done in a manner that furthers the goals of the U.S. Department of Education.

2. Deciding whether or not to go to college, where and what type of school to apply to, and how to pay for it is the beginning of the many financial choices students are faced with.

3. Apply for Aid: FAFSA
Federal Student Aid provides financial aid in the form of loans, grants, and federal work study funds. Completing the Free Application for Federal Student Aid (FAFSA) is the first step in applying for federal grants, and loans. Remember, the first word in FAFSA is “FREE” – there’s no need to pay anyone for help to complete the FAFSA. Look for free FAFSA completion workshops offered by area high schools, colleges and community organizations to get help completing the FAFSA.
Students should NEVER assume they will not be eligible to receive federal student aid! This application provides access to largest source of college funding, and schools will also use it to determine eligibility for institution-based financial aid.
Provide some basic information and the FAFSA4caster will estimate eligibility for federal student aid. Estimate will be shown in the "College Cost Worksheet" where users can also provide estimated amounts of other student aid and savings that can go towards their college education.
Available in Spanish

4. Apply for Aid: FAFSA
Completion time averages 32 minutes
Real-time help available by phone at FED-AID or via on-line chat

5. The cost of medical education
Quillen COM M1 In-state Student Educational Budget for
Tuition & Fees $ 33,661
Health/Disability Insurance Allowance $ 2,348
Book, Supplies, Equip Rental & Diagnostic Equip $ 2,350
Transportation & Misc $ 5,636
Room & Board $ 12,324
Allowance for Federal Loan Fees $ 1,038
Total $ 57,357

6. Other Borrowing Resources
Federal Loans First Understand differences between federal and private loans Federal vs. Private Loans Borrow Smart Free money first. Consider accepting less loans than offered. Deciding on Loans
Federal Student Aid offers students low cost borrowing options and flexible repayment options. If possible, students should avoid using private loans to pay for school. Before borrowing, students should ALWAYS make sure to take the time to understand the terms of the loan, repayment options, and estimated monthly payment amounts.
Financial aid award letters may include loans. Students are not required to borrow all of the money offered in loans. Awards should be reviewed with financial aid counselors to help determine borrowing needs. It’s not always bad to borrow but it’s important to make wise borrowing choices!

7. Types of financial aid Federal Loan Program (Direct Lending Program)
Annual Graduate Loan Limits for Federal Loans
(Aggregate Loan Limits for Health Professions Lifetime Federal Stafford student loan limit – $224,000)
Unsubsidized Student Loan - $42,722
The U.S. Department of Education is your lender.
Government does not pay interest during periods of deferment or grace
Current interest rate is 6%
Has a 6-month grace period
(if you have not previously used the one-time grace period allowance)

8. Types of financial aid Federal Loan Program (Direct Lending Program)
Annual Graduate Loan Limits for Federal Loans
Federal Plus Student Loan – The maximum loan amount is the
cost of attendance (determined by the school) minus any
other financial aid received.
The U.S. Department of Education is your lender.
Government does not pay interest during periods of deferment or grace
Current interest rate is 7%
Has a 6-month grace period
(if you have not previously used the one-time grace period allowance)

9. Types of financial aid Private Student Loans
If you don't have good credit, and there is no one with good credit to cosign for you, you may not get a private loan
Some lenders have set rates such as the current LIBOR rate (London Interbank Offered Rate- the interest rate international banks charge each other to borrow U.S. dollars) or the Prime rate (interest rate that lenders give to their best customers)
For both of these rates, you can expect to pay at least a couple of more percentage points above the going rate for a private student loan
Standard 15-year repayment term
Private student loan consolidation means that you cannot consolidate private loans with federal loans, but you can sign up for combined billing
In comparison to federal loan options, repayment, deferment, forbearance, grace, and loan forgiveness options may be limited.
Death and/or disability loan discharge may or may not be available. Check with the lender of the loan.

10. Why Financial Literacy?
FSA Borrower Survey Question: Q: If you could go through the process of financing your education all over again, would you take the same actions or make a change?
Students need information about financing their education before choosing a school and borrowing money to attend

11. Money Management Tips
Track your money. Once you realize how much impulse buying and other indulgences cost you, it will be easier to tell yourself "NO! The 30 Minute Rule: If you see something you “have to have” wait 30 minutes, then if you still can’t live without it—make the purchase.
Be frugal. Going to the movies or even ordering pizza might cost less if you show your student I.D.
Stay financially secure by using caution.
Don't give anyone your Social Security, credit card, or bank account numbers unless you know why they need them.
Review credit card statements, bank statements, phone bills, etc. for unauthorized use.
Never give a federal FSA ID or passwords to anyone!
Avoid scholarship scams. True scholarships never charge fees and FAFSA application information is available and free to everyone.

12. Money Management Tips
Make a personal budget based on your savings and income. Round up your available cash including gift money (if you're a recent college grad), scholarship money, student loans, summer job savings, and money from your parents. You may want to designate types of money for certain uses.
Think of student loans as an investment in your education and your future. Use student loan funds only to pay school expenses like tuition and books and living expenses. Limit extravagant expenditures.
Give yourself an allowance. Track your spending to find where your money goes and then choose between your wants and real needs.

13. Money Management Tips
A budget is like a money diet. Just because you setback one day, doesn't mean you can't start again tomorrow. If you go over budget this week, next week commit to staying under budget. Budget for a month at a time but set aside some time to review your finances each week.
Build an emergency fund. Save change in a piggy bank or jar.
Get a money calendar. Any calendar with big windows with room to write in amounts will do. Use the calendar windows to note:
due dates for scholarship and grant applications. Keep applying for financial aid all the way through college. Missing an application deadline is the most common mistake students make when applying for scholarships.
upcoming school expenses (books and tuitions).
bill payment dates.
upcoming activities where you'll need cash. (movies, dances, parties, etc.).

14. Money Management Tips
Take control of your credit cards. Try not to carry a balance on your cards, this will save you money. Additionally, use credit cards that don’t charge an annual fee. Pay your bills on time and online. Late fees add up and they may have a negative effect on your credit rating. If you do miss a payment, call the creditor and ask to have the late fee waived. Make bill paying easier by filing your bills by due date.
Ask for help when you need it. If you run into a financial situation, talk with our financial aid office, we are here to assist you.

15. Student Loan Repayment
Most medical students are not able to work during medical school because of the rigorous curriculum and schedule they are required to complete (36+ semester hours per term).
Due to higher educational debt, personal debt (i.e. credit cards, etc.), and changes brought on by congressional action in recent years, students are no longer able to follow their passion for medicine but are choosing specialties that will support their financial obligations.
High annual interest rates on federal educational loans are causing interest on unsubsidized Stafford (6%) and Plus (7%) loans to accrue as a faster rate and increase loan payment amounts.

16. Student Loan Repayment
Borrowers MUST repay their loans, regardless if they complete their education
Federal loans have various repayment plans and other options
- Income-Based & Graduated Repayment Plans
- Deferment, Forbearance, Loan Forgiveness, Consolidation
The impact of not repaying can be detrimental to future borrowing and financial opportunities
An understanding of Repayment obligations starts as soon as students are considering borrowing money and they should look at how much will need to be repaid on a monthly basis prior to agreeing to borrow money.
Next page shows how to do that.

17. Advantage of Returning Direct Student Loan Funds
Unsubsidized loan $42,722 for M1, M2, M4 and $47,167 for M3 years.
M1-$42,722 x (48 months- grad) will accrue approx. $10, in interest
M2-$42,722 x (36 months-grad) will accrue approx. $7, in interest
M3-$47,167 x (24 months-grad) will accrue approx. $5, in interest
M4-$42,722 x (12 months-grad) will accrue approx. $2, in interest
Total borrowed $175,333 plus interest accrued $26, for a overall total of $201,

18. Advantage of Returning Direct Student Loan Funds
Will returning any portion of my loans make a difference? Let’s see!
Example-Starbucks
Giving up Starbucks and saving $15.00 a week would save approximately $ 780 a year which is about $ 390 a semester (a small amount that makes a big impact later on.
$ 390 per semester x 8 semesters = $ 3,120 plus $ 24 interest = $ 3,144
Totaled borrowed $172,189 plus interest accrued $ 25, for an overall total of $197,892.50
By returning $ 3,120 of the student loan a student will graduate with an overall loan debt of $197, with a standard repayment of $ 2,197 instead of $ 2,252.
That is a savings of $ by simply giving up $ 15 per week while in school.

19. Advantage of Returning Direct Student Loan Funds
By returning even a small amount of student loans by the 119 day after disbursement, you can reduce the overall loan debt, reverse interest, and reduce your required payment during repayment. Please keep in mind, you can still return money at any time, but after the 119th day, your interest will stand.
Let’s see what returning $ 1,000 per semester will save
Total borrowed without returning any funds $ 201,
Total borrowed if you returned $1,000 per semester $167,333 plus interest accrued $ 24, for a overall total of $ 192,
Savings of $9, with a repayment of $2,134 will reduce your payment by approximately $ 118/month.

20. AAMC - Managing Debt: Repayment Estimator
Repayment plans and loan payment calculators are available at: Repayment Calculator

21. AAMC Monthly Payment Estimator for Medical Students—Direct Unsubsidized Loans

22. AAMC Monthly Payment Estimator for Medical Students—Direct Plus Loans

23. The Guide to Educational Debt Management
Know Your Portfolios
Know not only what loans you have borrowed, but which loans are Federal Unsubsidized and which ones are Plus Student Loans. You should also know from whom you have borrowed your loans and, most importantly, who services them.
Know the “Relative Cost” of your loans
Consider not only the interest rate, but also the capitalization policies on your loans in order to determine which ones are costing you more.
Know your Grace, Deferment & Forbearance options
These are tools to help you manage your student loans throughout residency.

24. Staying Informed: StudentAid.gov

25. Federal Financial Literacy Information
Money Smart
My Money
Consumer.gov
Many other FREE federal financial literacy resources are available
Federal Reserve Education
Consumer Financial Protection Bureau

26. AAMC.org